Regarding the transit analogy, it came up in another DRM conversation ages ago but I thought I'd dig up my old post and put it here since it gave some interesting figures.
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I was reminded of this post this morning while listening to my local public radio station. They had a story on the light rail in LA which uses the honor system. They had a study which said that 11% of patrons routinely do not pay. I don't know what the methodology was but for the sake of argument I'll just accept it as accurate as well as their estimated loss from this behavior of $5.5M. To combat this, they are proposing to install turnstiles at the cost of $30M with an estimated $1M of annual maintenance. This seems so ludicrous to me. Even if you assume that 11% will remain customers once they force people to pay and you will indeed recover that $5.5M and not lose any of the remaining 89% of honest paying customers when you make things slower and tougher for them, the cost really doesn't balance especially when you consider these capital "improvements" are normally done with bond money. Even if they paid cash, the break even point is around 6.5 years. What's the lifespan of the turnstiles? What other improvement could the money be used for? How many of those 11% would be too poor to afford the ticket? It could be a social benefit to allow them free access. It's like the DRM-mentality in so many ways. They just see the fact that someone's getting something for free, not the fact that they may be throwing $10 at a $1 problem and hurting their own product in the process.
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